Dividing Pension and Retirement Benefits in a Florida Divorce

Going through a divorce is usually one of the most challenging experiences someone faces. Emotions can run high, decisions might seem overwhelming and the future appears uncertain. While there are numerous present-time concerns, you should not overlook how the end of your end of your marriage will affect retirement savings and pension benefits accrued by you and your spouse. These assets are part of the property division that occurs during a divorce, so you should be aware of your options as well as the applicable state laws and federal regulations.

When it comes to retirement assets such as 401(k)s, IRAs, pensions and other savings plans, equitable distribution is the guiding principle in Florida divorce law if spouses cannot agree on a division of assets and debts. Equitable distribution means that marital property, including retirement savings accumulated during the marriage by either spouse, should be divided fairly, although not necessarily equally, between the spouses. It’s crucial to recognize that only assets acquired during the marriage are typically subject to division, with certain exceptions for assets commingled or otherwise converted into marital property during the marriage.

Determining the value of retirement assets can be complex, especially when considering factors such as vested versus non-vested benefits, premarital contributions, and potential future growth. Consulting with financial experts and an experienced family law attorney can be instrumental in accurately valuing these assets and ensuring a fair division. Some of the options that might be used in your case include the following:

• Direct division — In some cases, retirement accounts can be divided directly through a Qualified Domestic Relations Order (QDRO) or similar orders. A QDRO is a court order that establishes the alternate payee’s right to receive a portion of the retirement benefits when they can be accessed without penalty.
• Offsetting assets — Instead of dividing retirement accounts directly, couples may choose to offset the value of these assets by allocating other marital property of equivalent value to each spouse. This method allows for flexibility in asset division while still achieving an equitable distribution.
• Lump-sum payment — One spouse might agree to waive their interest in retirement assets in exchange for a lump-sum payment or other assets of comparable value.

Regardless of the method chosen, it’s essential for divorcing couples to work with experienced legal professionals who understand the intricacies of divorce law and have experience handling complex financial matters for high net worth clients and other Floridians. At Timothy W. Terry, Attorney at Law In Orlando, I advocate for clients seeking a fair share of pension and retirement benefits. Please call 407-567-0406 or contact me online for a free consultation.